Quick Takeaways
- AMD’s data center revenue nearly doubled, with further growth forecast.
- Qualcomm’s handset sales fell, but it targets $5 billion in FY2027 data-center revenue.
- Arista’s revenue surged 59% as AI clusters drove networking demand.
- Supermicro sales soared; Eaton’s electrical backlog climbed 46%, signaling infrastructure expansion.
AI demand boosts chipmakers
AI investment is lifting sales across the technology supply chain. AMD reported third-quarter revenue of $13.4 billion, up 45% from a year earlier. Its data center sales nearly doubled, reaching a record $8.5 billion, as demand grew for server processors and AI chips.
Qualcomm, by contrast, is feeling pressure from weaker handset sales. Its fiscal fourth-quarter revenue fell 8%, while automotive sales rose 89%. The company is also targeting a new growth path: It expects its data center business to reach $5 billion in fiscal 2027. That is a forecast, not current revenue. Still, execution, rising production costs and limited supplies of memory and advanced packaging could slow its progress.
Servers and networks scale up
Demand is also reaching the equipment that connects and houses AI systems. Arista’s third-quarter revenue climbed 58.5% to $3.66 billion, reflecting stronger demand for high-speed data center networks. Supermicro reported preliminary, unaudited first-quarter fiscal 2027 sales of $19.9 billion, nearly four times its total from a year earlier. Yet its gross margin fell from the prior quarter, a reminder that rapid growth can bring financial strain.
These investments support faster AI services and scientific work, from research to business tools. However, larger computing clusters need more power and cooling. Networks and specialized components can also become bottlenecks.
Power demand brings trade-offs
Electrical suppliers are benefiting, too. Eaton’s electrical backlog grew 46% year over year. Its figures cover utility and industrial markets as well as data centers, so they do not measure AI demand alone.
For everyday users, more infrastructure could eventually mean quicker digital services and new tools in health care, education and research. But the buildout requires substantial electricity, materials and capital. That may add pressure to power systems and raise costs. The gains are real; so are the limits.
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